ICANManagement InformationJob, Batch and Process Costing2021

Port Harcourt Refineries Ltd processes crude oil. Opening work-in-progress (WIP) for March was 2,000 barrels (60% complete for conversion; materials 100% added at start). During March, 18,000 barrels were introduced and 16,000 barrels were completed and transferred. Closing WIP was 4,000 barrels, 40% complete for conversion. Using the WEIGHTED AVERAGE method, what are the equivalent units for CONVERSION COSTS?

A17,600 barrelsCORRECT
B16,000 barrels
C17,200 barrels
D18,400 barrels
AI
Toaster Teacher
Why the answer is A, and why the others tempt you.
Under the weighted average method, equivalent units = completed units + (closing WIP × % complete). Equivalent units for conversion = 16,000 + (4,000 × 40%) = 16,000 + 1,600 = 17,600 barrels. The weighted average method combines opening WIP costs with current period costs and does not separately identify the degree of completion of opening WIP, unlike the FIFO method.
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